COUNCIL bosses in North Wales, who are taking on the Government in a long running row over housing benefit payments, will be stepping up their legal challenge in the autumn.

The Department of Works and Pensions wants to claw back almost &#xA3;500,000 from Anglesey County Council, claiming a catalogue of under-staffing and incompetence in the island's housing benefit office led to massive overpayments.

Claims weren't referred to a rent officer - a measure designed to stamp out fraud.

Originally the council had faced a "claw-back" claim of more than &#xA3;2m after the problems, dating back to a three year spell from 1997, where highlighted in a damning report by District Auditor Ceri Stradling,

Eventually the demand was cut by 80pc but the county council has continued to fight and will be in the High Court in London on October 13 to mount a judicial review after being given the go-ahead by Mr Justice Sullivan at a hearing earlier this summer.

He agreed the council's challenge should not be "strangled at birth.".

If the council fail the island's council tax papers will have to pick up the bill.

At the time Mr Justice Sullivan said as well as fighting for a principle the council realised they were dealing with a "very large sum of money." .

He said poorer areas were likely to be hardest hit by the claw-back rules, as they had higher housing benefit claimants.

The council has already been "caned" for what has been described as a "state of disarray" in its housing benefit office over the three years, including widespread corporate failings.

The operational structure had been undermined by elected members and officers being at each others throats.

A statutory requirement, designed to protect the public purse from inflated rents and to ensure claimants receive the benefit they were due, was "simply written off".

But throughout the saga the council have argued there has been no actual loss to the public purse and no gain was made from "inadvertent errors'.

The court was told similar errors had been made by numerous other councils all over the country and the Govern-ment's stance against Anglesey was irrational and wholly disproportionate.

Apart from confirming the date of the judicial review the council refused to make a comment.

"This matter is on-going and at this stage it would be inappropriate to say anything."